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EXECUTIVE SUMMARY
Room and Board, owned and managed by John Gabbert for more than 25 years, is a nationwide furniture retailer operating in 11 stores for over 25 years and consists of 670 workers. Not wanting to compete by the traditional rules associated with the retail- furniture industry, the firm created its own supply chain and integrated multichannel sales. The company is focused on creating long- lasting relationship with its customers, as well as with its vendors and employees, who were all fully integrated into the model of selling quality furnishings.
The culture of the Room and Board is based on the principles of trust, respect, relationships, transparency, entrepreneurial ownership of one's job and career, and the importance of a balanced life. Moreover, its culture supported an energized, positive growth environment for its employees that fostered high employee engagement and in turn, high customer engagement. Emphasizing on building relationships, Room and Board values collaboration more than competition -which makes it unique from other industry retailers.


STATEMENT OF THE PROBLEM
Room & Board was wholly The company is considering to expand its market in Los Angeles, Seattle, Atlanta, Miami, and Washington D.C. while preserving and protecting its "relationship" business model at a growth rate that sustains its economic health. In doing so, they are to formulate and implement the effective strategies appropriate to such expansion and whether their unusual business model can be institutionalized in the said prospective locations which have diverse organizational cultures.

SWOT ANALYSIS
Strengths
Nearly all merchandise is private-held from different vendors with long-established business relationship
Corporate culture based on "relationship" business model that boosts employee morale and customer satisfaction
Very low employee turn-over
Attractive benefits for full-time and part-time employees
Effective customer relationship management
Solid reputation for quality
Wide showrooms
Multiple channel sales approach
Weaknesses
Total dependence on U.S. suppliers and designers
Target market limited only to US customers
Static Website Interface (Lack of image serving platform that provides dynamic images)
Lack of advertising
Less number of stores
Opportunities
Market expansion to other countries
Growing online sales
Going GREEN (environmental sustainability)
Initial Public Offering
Threats
Saturated market for furniture retail industry
Furniture models are susceptible to imitation
External changes (tax impositions, laws and policies, etc.)
Lower cost competitors or imports
Proliferation of capital-intensive technology
Competitive Analysis (Porter's Five Forces Model)
Rivalry Among Existing Competitor
Furniture industry is a highly competitive industry due to the large number of competing firms portrayed by other low priced furniture producers and retailers. Most of the retailers import products from China selling at a low price thereby signifying intense competition. Therefore Room and Board would confront industrial rivalry effectively in maintaining brand identity.
Threats of New Entrants
There are little or no entry barriers, but the intensity of competition may discourage potential entrants. Although the required initial investment is not substantial and economies of scale can be easily achieved, new entrants must invest a greater amount, develop long-standing relationships with clients, and select suitable and competitive locations for outlets for which much patience and capital is required. Due to less regulations, the threats of new entrants are moderate, with no immediate threat because of the intensity of competition. To face these threats, Room and Board should maintain its brand loyalty amongst the customers.
Threats of Substitutes
There are many substitutes available in the market including those which are retailed by Wal-Mart and other rival businesses. However, there is no specific product that can substitute Room and Board's furniture due to its great designs influenced by modernized classical model by taking the best of the past and reinterpreting it for life today. Through simplicity of design and innovative technology, Room and Board's timeless, flexible and enduring products can contend. Also, it offers products different from traditional furniture due to the use of high quality hardwoods, granite and steel which are different from what other companies use. Since the current trend is "going-green", many firms are following this concept. However, the demand for basic, functional furniture has remained relatively constant, therefore there is less threat of substitutes in the near future.
Bargaining Power of Buyers
Living in the information age, where everything is now available on the internet, makes price comparison easier. This gives customers greater choices and alternatives to choose from which yields to the great amount of bargaining power of buyers. So the organization should constantly add value to its products as well as to customers to minimize the impact of the customers bargaining power. This would enable the organization to face competition more effectively as well.
Bargaining Power of Suppliers
Room and Board has succeeded in establishing vendor relationships which evolved over the years into true partnership. Room and Board has control over product quality , inventory availability and risk of supply chain disruptions, therefore suppliers possess less bargaining power, and can be compelled to meet the terms of Roma and Board rather than vice versa.

PESTLE ANALYSIS

POLITICAL FACTORS
Political influences and legislations affect industries in most economies. Government regulations like taxation, labor policy, and excise duties issues may be a threat, as these policies will change with the change in government. There is encouragement of exports from US government, constraints for exploiting local wood material and so on. Moreover, attractive policy of encouraging foreigners' investment is most popular in Asian countries.


ECONOMIC FACTORS
Economic factors affect the purchasing power of potential customers and the firm's cost of capital. Economic trends that affect the furniture retail industry are the gross national product (GNP), personal disposable income growth rates, inflation rates, unemployment levels, interest rates, exchange rates, tax rates and wages rates. The stability of US economy encourages positive growth for Room and Board Inc.

SOCIAL FACTORS
Room and Board fostered a business culture that values customers and employees, therefore creating a good public image. The requirements, tastes and fashions of the customers are subjected to changes frequently. Therefore Room and Board should continue to possess its capacity to adapt to the socio-cultural trends.

TECHNOLOGICAL FACTORS
The world is subjected to a series of technological revolutions and so does the furniture industry that is affected by major shifts in the technological paradigms. These factors can affect the cost, quality and may lead to innovation. Online shopping is a current trend, involving more customers. Therefore, Room and Board should concentrate on growing online sales, as well as improving their products to meet customer demands.

LEGAL FACTORS
The legal compliance of the company is strictly implemented with the relevant and applicable laws and regulations that pertain to the environment, social and working conditions. The company also scheduled the most demanding requirements to be specific in maintaining the list of laws and regulations and with the procedures.

ENVIRONMENTAL
With increased pressure on companies to address environmental issues and to adopt ways of operations which what would benefit society, Room and Board should consider strategies that encourage sustainability while achieving above average returns.





















Balanced Scorecard
In a financial perspective, Room and Board embraces a unique multiple-stakeholders model that values quality and relationships ahead of the bottom line while producing stellar financial results up to 2007. It also disavowed debt and equity-growth financing and has the same pricing model for every customer. More sales are generated from the stores than in the phone or the web and sofa & chairs are sold more than bedroom and dining room furnishings.
Customer-wise, they focus on interaction with the customer from beginning to the end. Customers are mainly consuming high-quality and exclusive design of furniture and less concerning price which led to a customer satisfaction rate of more than 96%.
In the internal business process, it discusses needs and share financial information with its own supply chain of which approximately 85% are in the US. It owns its freestanding store locations decorated with self design and furniture with easy access and having an ample parking space. It plans to expand more in the US. It has its own delivery center in partnership with Minneapolis Company. Lastly, it has a culture in which trust, respect, relationships, transparency, entrepreneurial ownership and importance of a balanced life are prevalent. It provides more facilities for employees and shares accountability with them creating harmony and a good work environment.
Room and Board's learning and growth is based on its Guiding Principles which is revolves around the philosophy of trust, respect, relationships, transparency, entrepreneurial ownership of one's job and career and the importance of a balanced life. It trains its own staff for delivery to provide good quality service to customers and also helps suppliers and employees learn more of the company's strategic information and action. For 20 years, it already has 9 retail stores spread across the US.

Internal Factor Evaluation Matrix











External Factor Evaluation Matrix













Internal-External Matrix


Based on the IE matrix, Room and Board Inc. belongs to Quadrant IV. Quadrant IV is described as grow and build, where strategies such as forward, backward, or horizontal integration, market penetration, market development, and product development are applicable.



Ansoff Matrix















Alternative Solutions
They may not pursue further expansion of their business for it will only bring problems in the future connected with numerous retail stores. They can also modify their company culture, and may to choose to restructure their model by going public.


Strategic Recommendation
Room and Board must improve their company culture. Firstly, instead of paying employees a fixed salary only, they can pay a fixed salary plus a commission-based compensation in order to recompense the extra efforts exerted by the employees. They can also give a certificate of recognition for the most outstanding employee for the month without monetary rewards in order to maintain a competition-free environment. Second, they can innovate through inter-organizational cooperation, specifically a strategic alliance with Europe and Asia. Third, they have to adapt the trend of producing eco-friendly furniture designs.









References
Hess, Edward. 'Case 3: Room And Board'. Print.
Jones, Jennifer, James Lambert, and Paul Ciasullo. Williams-Sonoma, Inc.. 1st ed. 2012. Web. 24 Mar. 2015.
Ukessays.com,. 'The Furniture Company Spark Furniture Marketing Essay'. Web. 24 Mar. 2015.
Suwaris, Sharleen. 'IKEA Case Study'. Scribd.com. Web. 21 Mar. 2015.
Syahidah, Nor. 'Room And Board'. Scribd.com. Presentation. Web. 21 Mar. 2015.



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